Over the past 10 years, Lincoln’s profit-sharing payments have been substantial. Maria’s
annual salary was $40,000 last year, and she earned a profit-sharing payment of
$10,000. Maria’s profit-sharing award represents approximately what percentage of her
annual salary?
A) 25 percent
B) 40 percent
C) 45 percent
D) 55 percent
Which of the following is a reason for employers to choose to engage contingent
workers?
A) to differentiate the value they place between contingent workers and regular
full-time workers
B) to avoid hiring regular, full-time workers
C) to withhold all employee benefits
D) to reduce employment costs per hour
An employee living in which place would benefit most from telecommuting due to
minimizing expenses and commute time?
A) Boston
B) Oshkosh, Wisconsin
C) rural Alabama
D) Walla Walla, Washington
For which reason does the IRS use the term “key employees”?
A) non-discrimination rules in retirement benefits
B) non-discrimination rules in health insurance benefits
C) top-heavy provisions in employer-sponsored qualified retirement plans
D) top-heavy provisions in employer-sponsored health insurance plans
The IRS considers Sylvia to be a highly compensated employee for Beautiful Pictures,
Inc., which means that she met which one of the following criteria (assume that the
previous year was 2015)?
A) either a current annual salary of more than $170,000; and, in the previous year, a 5%
owner or a 1% owner of the employer’s business whose annual pay was greater than
$150,000
B) either an annual salary of more than $170,000; or, in the previous year, a 5% owner
or a 1% owner of the employer’s business whose annual pay was greater than $150,000
C) an annual salary exceeding $50,000
D) an annual salary less than $170,000
A manager expects high levels of performance from Ashley, a newly hired employee,
because she graduated from a prestigious Ivy League university. A year later, the
manager rates Ashley’s job performance more highly than her actual performance based
on his initial belief. What kind of rater error was made by the manager?
A) negative halo effect
B) first-impression-effect
C) positive halo effect
D) contrast errors
In China, how much was the per capita expenditure on health in 2012?
A) $480 based on purchasing power parity
B) 480 yuan
C) $970 based on purchasing power parity
D) 970 yuan
In Germany, an employee can request up to how many year(s) of child-rearing leave?
A) 1
B) 2
C) 3
D) 4
Which of the following is an operational measure used in company-wide incentive
plans?
A) safety/occupational injury rates
B) revenue growth
C) earnings per share
D) operating income
John is just hired by a software company as a programmer. He is also a part-time
student at the local college and needs just a few credits to graduate from this college. A
college degree is required in order to work as a programmer in this software company.
Therefore, John receives below-minimum pay rate until he graduates from college.
Which type of pay rate does John receive?
A) green circle
B) red circle
C) midpoint pay
D) two-tier pay
Brazil’s workforce has approximately how many million people?
A) 95
B) 110
C) 120
D) 125
This term refers to a difference between the output of human judgment processes and
that of an objective, accurate assessment. This difference could be due to bias,
prejudice, or other subjective, extraneous influences.
A) content validity
B) rating error
C) the performance appraisal process
D) a first-impression effect
Wei is the HR manager of a manufacturing facility that has used the cross-departmental
system and has noticed that absenteeism rates have been significantly lower since
implementing this system. As a result, Wei may tell the managers that the company is
able to do which of the following?
A) award pay increases to those whose absenteeism is low
B) increase the size of the workforce
C) increase the size of the training budget
D) reduce the size of the workforce
Oliver is employed as a blue-collar worker in the metalworking industry in
Baden-Wurttemberg in Germany. His pay is based on minimum wage. Which of the
following is probably true regarding his minimum wage?
A) The Minimum Wage Council determines his hourly pay.
B) Germany uniformly does not have a minimum wage.
C) His wage is established through a collective bargaining process.
D) His wage is calculated based on the national minimum wage rate set by the
government.
Which of the following refers to payments an individual makes as a condition of
receiving medical services?
A) coinsurance
B) premium
C) deductible
D) copayments
Effective performance appraisals are based on
A) hiring experienced managers.
B) effective communication.
C) employees who rate highly in cognitive ability.
D) hiring managers with formal HR certification.
Which type of contingent worker would work for a company on a long-term basis,
presumably on an indefinite basis?
A) part-time employees
B) temporary employees
C) leased employees
D) independent contractors
Ryanair uses one type of aircraft in its fleet and requires their passengers to carry their
luggage to the plane. Which of the following competitive strategies does Ryanair use?
A) differentiation strategy
B) high quality strategy
C) brand notoriety
D) lowest-cost strategy
This law made it illegal to pay women less for performing equal work as men.
A) Equal Pay Act of 1963
B) Civil Rights Act of 1964
C) Davis – Bacon Act of 1931
D) Fair Labor Standards Act of 1938
The recently appointed CEO of XYZ Inc. uses a luxury summerhouse owned by the
company for rest and relaxation with his family as well as a place to invite important
clients before a lucrative business deal. XYZ Inc. also provides a membership to an
exclusive country club to its CEO. These kinds of benefits offered to CEOs are known
as which of the following?
A) discretionary bonuses
B) perquisites
C) golden parachutes
D) clawback provisions
When using compensation survey data, statistical analyses are used to integrate this
with the external market, in order to determine pay rates.
A) internal pay scales
B) nominal pay rates
C) internal pay benchmarks
D) internal job structures
This type of pay system rewards employees for successfully acquiring new job-related
knowledge.
A) person-focused pay
B) competency-based pay
C) merit pay
D) incentive pay
The GDP per capita describes which of the following?
A) a measure of earnings
B) the standard of living in a country’s capitol city
C) a country’s standard of living
D) the total value of a country’s economy
Which pay system is most commonly used in America today?
A) skill based pay
B) longevity pay
C) merit pay
D) seniority pay
Which of the following two are considered job evaluation techniques?
A) market-based and appeals-based
B) compensable content and job-based
C) market-based and job content
D) compensable content and job content
Which of the following could undermine competitive advantage?
A) basing employee benefits awards based on performance
B) offering flexible benefits plans
C) offering employee benefits as an entitlement
D) offering employee benefits following the completion of a lengthy probationary
period
Which of the following is one of the largest trade blocs in South America?
A) South American Free Trade Agreement
B) South American Union
C) South American Community of Nations
D) Latin Free Trade Association
After working a regular 40-hour workweek in the office, Mary takes her company
laptop home and generally spends an hour or two responding to work e-mails. This is an
example of which of the following?
A) working condition fringe benefit
B) employee choice
C) on call time
D) employer mandate
The Chinese central government is creating pressure throughout the wage structure
because
A) it is trying to increase Chinese citizens’ ability to purchase imported products.
B) it has raised minimum wage rates multiple times.
C) it has frozen minimum wage rates.
D) it has relaxed the one-child policy.
Who leads the process of analyzing jobs?
A) compensation generalists
B) HR specialists
C) HR generalists
D) compensation specialists
This type of sales incentive compensation plan offers the sales person a salary and
further compensation for achievement of specific, exceptional sales goals
A) salary-plus-bonus
B) salary-plus-commission
C) salary-plus-draw
D) salary-plus-graduated commission
What are the three questions that compensation professionals should answer to help
determine whether they are making a strategic contribution to the company?
A reliable ________ yields consistent results under similar conditions, when multiple
analysts reach the same conclusion about the major duties that comprise a position.
The ________ generation was born between roughly 1946 and 1964, and represents a
big swell in the American population as the workforce gets progressively older.
The demand for human resource professionals is ________.
Merit pay programs provide ________ increases to base pay.
________ refers to a group of two or more jobs that are based on similar work
characteristics, duties, and responsibilities.
A ________ is the difference between the maximum and minimum pay rates of a given
pay grade.
401(k) and 403(b) plans are examples of ________ plans.
Distinguish between qualified and nonqualified retirement plans.
Compensation represents both the intrinsic and extrinsic rewards employees receive for
performing their jobs. Together, both intrinsic and extrinsic compensation describe a
company’s total compensation system. Briefly describe both types of rewards and
indicate the professionals who are responsible for managing them.
Company stock shares are the main form of executives’ ________ compensation.
________ is one measure of a country’s standard of living.
The ________ Act of 2002 brought a number of reforms to enhance corporate
responsibility, enhance financial disclosures, and combat accounting fraud due to
dishonesty in companies such as Enron and Tyco.
________ are the social context or physical environment where work will be
performed.
________ have full-time jobs and plan on having long-term relationships with their
employers.
What are the three goals of compensation professionals?
